Agency Lending Disclosure of Principal (ALDOP) Update

In January 2004, an Industry Task Force consisting of representatives from the SIA (Capital Committee and Securities Lending Division), the Risk Management Association (RMA) Committee on Securities Lending, and The Bond Market Association (TBMA) was formed to develop recommendations for the proper reporting of securities lending transactions involving Agent Lenders and Broker Dealers.

The Task Force has focused on having Agent Lenders provide data that will permit Broker Dealers’ Credit and Regulatory groups to monitor credit exposure and to calculate capital and regulatory requirements based on transactions with the underlying Principal Lenders. While the transmission of this data will not require Broker Dealers to book the individual loans by Principal Lender, the records are to be retained by Broker Dealers in accordance with existing regulations applicable to books and records.

SunGard’s Loanet continues to focus on ensuring its ALDOP clients meet the October 2006 deadline for this regulatory initiative. In support of ALDOP reporting requirements, Loanet has released a suite of reconciliation, capital and credit reports, together with supporting online functionality, to support validation and testing. SunGard has participated in three industry-wide testing cycles involving more than 50 broker dealers and agent lenders, designed to exercise and validate the industry infrastructure, participants’ programming and procedures, and vendor supplied software.

To date, SunGard has handled more than 101,000 files, 92,000,000 records, and produced more than 7,000 reports for its clients. SunGard will continue to focus every effort on providing the tools to assist clients in meeting this critical regulatory requirement.